This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/business/2013/apr/29/balfour-beatty-profits-warning
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Balfour Beatty feels chill from construction slowdown | Balfour Beatty feels chill from construction slowdown |
| (35 minutes later) | |
| Britain's struggling construction sector suffered another blow on Monday as building firm Balfour Beatty issued its second profit warning in six months. | Britain's struggling construction sector suffered another blow on Monday as building firm Balfour Beatty issued its second profit warning in six months. |
| The company, whose shares tumbled nearly 14% in early trading, blamed the declining construction sector and poor management in its UK division for the announcement, which will wipe £50m off profits in the current financial year. | |
| It comes less than a week after the latest GDP figures showed construction output was one of the weakest areas of the UK economy, falling 2.5% in the last quarter. | It comes less than a week after the latest GDP figures showed construction output was one of the weakest areas of the UK economy, falling 2.5% in the last quarter. |
| The company told shareholders: "The UK construction market has been a challenging environment in which to win and execute work. Market conditions which deteriorated significantly in the second half of 2012 continue to be difficult. | The company told shareholders: "The UK construction market has been a challenging environment in which to win and execute work. Market conditions which deteriorated significantly in the second half of 2012 continue to be difficult. |
| "Change in procurement trends, which we have previously highlighted, have persisted, allowing customers to impose increasingly stringent conditions on to contractors." | "Change in procurement trends, which we have previously highlighted, have persisted, allowing customers to impose increasingly stringent conditions on to contractors." |
| It revealed that new chief executive, Andrew McNaughton, who joined last month, will take charge of the UK division after an internal review found significant failings and "specific instances of poor operational delivery". | |
| Balfour Beatty was keen to stress that the profit warning was due to its UK division, highlighting that operations in Asia, the Middle East, US, Australia and Germany were in line with expectations – although there will be a £10m dent to profits from its German railway operations. | |
| A previous profit warning in November last year was also blamed on the poor UK construction sector, with a dearth of major construction projects and new public sector contracts unlikely to materialise until 2014 or 2015. | A previous profit warning in November last year was also blamed on the poor UK construction sector, with a dearth of major construction projects and new public sector contracts unlikely to materialise until 2014 or 2015. |
| The UK operation has already been revamped, with 650 job losses. | The UK operation has already been revamped, with 650 job losses. |
| With government cuts and a lack of major building projects, Balfour Beatty has suffered since building the Olympic aquatics centre, although it was awarded a £130m contract last month for part of the London Crossrail project. | With government cuts and a lack of major building projects, Balfour Beatty has suffered since building the Olympic aquatics centre, although it was awarded a £130m contract last month for part of the London Crossrail project. |
| Shares in the company were down 34p at 212.5p in morning trading. | Shares in the company were down 34p at 212.5p in morning trading. |